Collins Foods expects growth to continue

KFC and Sizzler franchisee, Collins Foods, expects sales growth to continue into the second half of fiscal 2013 despite estimating it would spend about $2.5 million on the carbon tax.

The company posted a $7.4 million profit for the half year to October 14, a significant increase on the $600,000 profit made during the first half of 2012.

However, Collins Foods said the 2012 results were affected by costs relating to the company listing on the Australian Securities Exchange and capital reconstruction of the group.

"On a proforma basis, HY13 NPAT was down 7.5 per cent on HY12 due to the impact of the carbon tax, promotional discounting, and operational cost increases which could not be fully passed on to consumers," the company said.

The company was confident that sales growth would continue into the 2013 second half with retail conditions in Queensland, where Collins Foods has most of its restaurants, improving.

But chief executive Kevin Perkins said he expected the carbon tax would cost the company about $1.5 million on power and perhaps another $1 million through suppliers over fiscal 2013.

He also said the return to profitability was largely driven by its KFC restaurants.

"While we have also seen evidence of improvement in the underlying Sizzler business, the casual dining segment appears to be lagging the broader market in terms of growth," he said.

Mr Perkins said the biggest problem for Sizzler was people were not tending to dine out earlier in the week, with Monday to Wednesday numbers softening.

"The weekends are still strong," he told AAP.

"People still like us a lot, they just don't eat out as often. Meals at home are up and maybe that's a bit to do with MasterChef and the work Coles and Woolworths are doing."

The company had opened one new KFC restaurant in the past six months and was looking for opportunities to open more.

Collins Foods was also planning on launching grilled chicken strips and a kid's menu at KFC over the next six months and would be promoting the Sizzler salad bar over summer.

Mr Perkins admitted that most people go to KFC to eat fried food and they had tried grilled products before with limited success but hoped that having an alternative would entice larger groups to the restaurants.

"It's to stop the veto from the person who says 'I don't eat fried chicken'," he said.

At 1421 shares in Collins Foods increased one cent, or 0.79 per cent, to $1.28.

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